LLC vs. Sole Proprietorship

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Stangman98

Senior Member
The photographers on here that run your own business and sell photos and photo shoots, do you operate under an LLC or do you work as a sole proprietor?
With the amount of sue happy people in the US now a days I was thinking that the only way I would start a business is if it were an LLC.
 
J

jdeg

^ broke something
Staff member
I'm technically a single member LLC. It's taxed the same as a sole proprietor, but like you said your personal assets are protected. Not to mention you can more easily get things like business credit cards, loans, checking accounts, insurance, etc.
 
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PhotoAV8R

Senior Member
Stangman98 said:
...do you operate under an LLC or do you work as a sole proprietor?
Click to expand...
My "day job," for now, is taxes. And, from a tax perspective, you're really talking apples and oranges. An LLC is not a form of business under the federal tax code. Those are corporations (C and S), partnerships and sole proprietorships.

An LLC is a designation under state law. The intent is to provide liability protection for the principles of the entity. The underlying business files its tax return as one of the other types. If you want or need that protection, form an LLC under your state regulations. You still have to decide how to file your tax return.

BWTHDIK
 
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Photowyzard

Senior Member
Talk to a good incorporation lawyer. Laws are different in every country, but I personally wouldn't leave myself open to a lawsuit if I could avoid it.

Your operating company should be nothing more than a shell.
You own all the assets and rent them to the company.
(this has advantages and disadvantages when it comes to depreciation)

Everything a good
Lawyer
and a
Good accountant,
will figure out and gladly explain to you.

Get professional advice, not internet advice on setting up a business.
 
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Browncoat

Browncoat

Senior Member
There are a few advantages to Sole Proprietorship, but LLC is by and large a better solution for most people, even if you are the only person in the business. You can even set one up online if you know how to cross t's and dot i's. However, I would highly recommend talking with a legal professional first. If you're serious about doing this, you have to take all the necessary steps to ensure it's done correctly.
 
R

riverside

Senior Member
Stangman98 said:
The photographers on here that run your own business and sell photos and photo shoots, do you operate under an LLC or do you work as a sole proprietor?
With the amount of sue happy people in the US now a days I was thinking that the only way I would start a business is if it were an LLC.
Click to expand...

LLC liability indemnity varies by state. If you don't think a lawyer will include you as an individual in a civil lawsuit against the actions of your LLC which you personally performed, you're fooling yourself. I have/had LLCs in four different states and none exempt the LLC manager/owner from state or muni tax liability. Be it proprietorship, LLC or corporation, you have the same administrative overhead with bookkeeping and tax filing.

See a lawyer and then a CPA in your state to determine which business entity best suits your purpose. Don't just pick them at random, get referrals from people who have long experience with their services. It'll be well worth the few hundred dollars and peace of mind.
 
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